October unemployment report to spark market

Friday (November 6), the Labor Department is expected to release date on October unemployment.  Forecasts call for 175,000 job cuts during the month, according to a poll of analysts by Reuters.

Experts predict that unemployment climbed to 9.9 per cent in October as it sits just on the fringe of an inevitable surge past ten per cent in the coming months.  If the October estimate holds true, this would mark the 22nd month in a row of job losses, though the pace of losses has slowed significantly.

Unemployment continues to be the sector of the economy lagging behind the recovery effort.  Companies appear to still be hesitant to hire back displaced employees or to expand operations because of remaining uncertainty.
Another growing thought among economists is that many companies have likely discovered leaner ways to operate and run their businesses as a result of the economic crunch. 

Companies that might have reluctantly let employees go in the last few months might not realize efficiency benefits if they are getting the same or better product from a reduced workforce.  This would also lead to slow interest in new hires.

The unemployment report is sure to have a significant impact, one way or the other, on Friday’s trading in the stock markets. A report in line with expectations or one that is dramatically better than anticipated could drive equities hire to close out the week.  It might also have an effect on the dollar and other speculative commodities like oil and gold that have preyed on the weak dollar in lieu of the bad economy.

The dollar could also see an effect of a better jobs report.  The greenback is in trouble after the Fed reported Wednesday that it is likely going to keep its lending rate near zero for a long time.  This is going to make the dollar undesirable for speculators who like to carry currencies that offer a nice yield income opportunity to offset currency trade risk.

<a onClick="javascript:pageTracker._trackPageview('/outgoing/article_exit_link');" href="http://www.livecharts.co.uk/MarketCharts/crude.php" title="oil price">Oil price</a> is near $80 per barrel and gold price is at $1,091.10 as they each have made gains against the floundering dollar, as have major currencies.  The direction of the dollar and correlated products is sure to be affected if the unemployment report produces a result much lower or higher than expected.